Submitted by: Adrianna Notton

In many respects it is one of the things that people still find difficult to talk about. While we can discuss the financial problems of countries, it is often a lot harder to discuss the finances when it concerns ourselves. However not talking about a problem and not doing anything about it will not make it go away. One way to do something about it is to try and reach a debt settlement.

The important thing to remember is that the companies involved will very rarely want to go to court. Naturally they will do what they can to get their money from you and will put pressure on you to repay them. However it is very rare that an agreement cannot be settled before the need for legal intervention.

It is also often a good alternative to bankruptcy. Creditors naturally want to avoid this as well because it could potentially mean that all debts accrued could potentially be wiped out. This would then mean them getting no money at all from you. Therefore it is worth exploring this option.

Before you contact creditors you should check to see if the debt has not been written off already. This does occur sometimes and could mean that they are trying to pursue you for something that they are not allowed to contact you about. This should be checked thoroughly to ensure that this has been recorded.

Companies have a certain period of time to collect. This is usually referred to as the statute of limitations period. If the company pursues you after this date then you are legally entitled to point this out. This does not mean they will stop pursuing you but it does mean you have the means to try and prevent it, hopefully without the need for court intervention.

Generally this kind of agreement and any thing like this will be recorded on your credit report for around seven years. This will naturally affect your ability to apply for any further credit and could restrict you for getting certain mortgages, loans and so forth. After this seven year period this should be removed from the record.

Sometimes this may remain on your credit report even after this period has elapsed. This is why it is important to check your credit rating as much as possible in order to make sure it is completely up to date with your latest credit information. If you see something there that is not accurate or is out of date then it is important to challenge it.

There are a number of companies that offer debt settlement. As with any service it is important to look beyond the advertising and the promises that are made. Before you approach a company you should look for someone who offers free independent financial advice. This could be your local financial ombudsman, a financial helpline or another counselling service. With the right advice and a sensible approach you should be able to reach a fair agreement with your creditors.

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